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IFAs back mutual PI and with-profits

An overwhelming 80 per cent of IFAs support the idea of a mutual fund to solve the professional indemnity insurance crisis, according to a survey conducted for Money Marketing by The Exchange.

The support for a mutual scheme comes despite the fact that the FSA and trade bodies such as Aifa say it is unlikely to come to fruition over concerns for funding and criteria for joining.

The survey found that 39 per cent of advisers have yet to gain a mortgage qualification, as required by December 31 last year by the MCCB, while 61 per cent say they have achieved the standard. Half the 39 per cent say they do not intend to seek a qualification in the next two years.

Just 3 per cent of advisers believe the proposals outlined in the Pensions Green Paper will increase savings in the UK, with 72 per cent claiming they will make no difference.

Most IFAs say they continue to recommend with-profits to their clients, despite bad publicity for the product, and 54 per cent believe they represent a safer investment than unit-linked products.

The questions were posted for MM on The Exchange&#39s platform until the end of last week. In total, 150 advisers responded.

Exchange public relations manager Charlie Musson says: “We are surprised that over half of respondents are still advising clients that with-profits is a safer form of investment. This suggests these products have a strong future despite recent announcements by many life offices concerning their funds.”

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